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Department of Housing and Urban Development (HUD) Secretary Ben Carson announced Monday that the agency has reached an agreement with the Department of Justice (DOJ) to clarify and reduce penalties for underwriting errors on mortgage loans made through the Federal Housing Administration (FHA).

The penalties were assessed under the False Claims Act. Legal action and settlements under the law – given out primarily as a result of the 2008 financial crisis – have led some financial institutions to stop issuing FHA loans, creating a void that has been filled by non-depository lenders.

Carson, while announcing HUD's Memorandum of Understanding with the DOJ, noted that depository institutions "represented nearly half of FHA's lender base in 2010, [but] represent just 15 percent today."

NAFCU met with Carson last year to share its core principles for housing finance reform and address credit unions' origination of FHA loans. The association is actively engaged with the administration, Congress and other stakeholders as they work on housing finance reform to ensure credit unions' unfettered access to the secondary mortgage market in any solution.